Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[Krugerrand]

Stubborn cat - how hard can it be? We know by next Friday the share price will have done one of the following:

-moved lower,
-stayed about the same,
or moved significantly higher.

What's the matter? You don't have a three sided coin?

Fine. Something, something, six.

 

[dc_h]

Fremont Drone Sep 12, 2020

• Fair amount of building materials left at 47700 Kato but a lot less than our first video
• Why no solar panels on top of the Fremont Factory?
• Previously visible cast panels disappeared - moved to the nearby building visible from Gigacasts
• Roof of Gigacast 1 near complete
• Gigacast 2 is being built as we drone
• Building next to Gigacast 2 has the cast panels now
• All model Y’s next to said building. Coincidence?
• Not much going on at the building site next door

Another reason MIC Model 3s are being exported from China. Model Y ramp has picked up lately and adding more casting machines will increase capacity of higher margin model Y vs 3. Margin expansion should accelerate the next 3 quarters as Y capacity and more lines dedicated to Y assembly in Fremont and lower cost MIC M3 are sold from Shanghai. Updated S&X could add a lot of margin depending on the cost of a potential updated SX with Road Runner batteries. 5% margin expansion at 8 billion per quarter is 400 million added net profit in Q4. If they are updating Model 3 internals, based on Y improvements, that will also add margin, reduce costs and improve range and performance.
As always, Tesla doesn’t live in a bubble. Externalities will likely keep the stock somewhat in check, but I expect more gains as the perceived risk of future earnings declines after Q3 and Q4 earnings and Shanghai Y starts rolling off the line and Berlin production becomes imminent.

 

[StealthP3D]

Fine. Something, something, six.

You put about the same amount of thought into that estimate as you put into your first test "drive" of a fully autonomous electric vehicle:

 

[dc_h]

Hey people, Informative is appropriate when somebody posts somebody else's work. When somebody posts their own work, that should be a Like or a Love, especially when it's as awesome as this. Thanks so much for doing this, @gabeincal.

Thanks, that was a great video and definitely informative. I hadn’t given it a an “i”.

 

[Krugerrand]

You put about the same amount of thought into that estimate as you put into your first test "drive" of a fully autonomous electric vehicle:

Pfft! You weren’t here when the SIX theory was examined VERY closely and discussed in-depth for months on end. It’s a solid, proven theory.

And that was a sweet ride. I was controlling it with my mind.

 

[Chunky Jr.]

Just posted a new daily Roundtable Roundup.

Thank you for doing this, it's very helpful

 

[RobStark]

I disagree with his conclusion number three that an extension of the lifetime of a consumer luxury vehicle from 20 years to 80 years will drastically increase desirability when purchasing. Technically yes it does kill the 20 year lifetime vehicle economically, but I don’t believe luxury customers generally think that way, and non-luxury buyers can’t generally qualify for that large of a loan.

However it should increase residual values and that would enable Tesla to either capture even more lease profit, or reduce the lease price, which would make it far more of a no brainer.

And as we all know the killer apps for 4k+ cycle batteries are high mileage vehicle use cases and Tesla Energy.

Car owners generally stop big repairs or maintenance items around year 15 because the car overall is not expected to last much longer. So it doesn't make sense financially.

If a Tesla has 250k miles and owner is confident drivetrain will last 1M miles then new suspension items and refurbishing the interior may make sense.

There are many consumers that would prefer not to pay a big premium for the latest Monitor/AI computer.

 

[bkp_duke]

Car owners generally stop big repairs or maintenance items around year 15 because the car overall is not expected to last much longer. So it doesn't make sense financially.

If a Tesla has 250k miles and owner is confident drivetrain will last 1M miles then new suspension items and refurbishing the interior may make sense.

There are many consumers that would prefer not to pay a big premium for the latest Monitor/AI computer.

The major flaw in the argument for the 1MM drivetrain is the assumption that the rest of the car design has not changed substantially since the car was introduced.

Tesla has shown that they will continue to innovate not just software, but hardware.

I have a 7.5 year old P85, and that car is starting to feel "long in the tooth" compared to my Model 3.


The P85 we have is going to be sold in the next year or so and replaced with a Model Y.
Reasons being:
1) Improved overall efficiency (we like being Net Zero or less when it comes to grid electric usage, and the Y is about 35-40% more efficient per mile than our 2013 P85)
2) Improved user experience. We cannot get Autopilot, etc. on our P85
3) Decreased charge time
4) Improved range


If Tesla's hardware innovations had plateaued, then the argument to keep the P85 would be stronger, but they haven't.

 

[Knightshade]

Another member already mentioned how the 1,000,000 mile battery benefits Tesla when they deliver the cars as leases. What hasn't been mentioned is that this same monetary benefit is available to all purchasers of cars with 1,000,000 mile batteries regardless of how long they plan to own the car. Specifically, they retain more resale value. Significantly more.p

Given the product does not exist yet for consumer purchase, and we have no resale data, this is called assuming facts not in evidence.

The current Model S, even without such a battery, already has much higher resale value than any ICE vehicle in its class.

Even if it's currently "only" a 450,000 mile battery- most people- not even second owners- ever drive a car anywhere NEAR that many total miles.... so I'm not sure how much economic value it adds for the new car buyer to know "This will probably still be good for its 4th owner someday"

I'm not sure why you are focusing only on cars costing $100,000 plus when Tesla has already reduced the cost of both Models S and X to under $80,000

Because Elon explicitly told us the Plaid S and X will be much more expensive than the existing ones.

Do you not believe him?

And given the only RR production known today is a small line down the street from Freemont, most expect what BD will give us short-term is the RR batteries in a Plaid S that'll be shown (and maybe even offered for rides, I dunno if they'd do that in a covid situation though)

Those batteries won't be mass produced for the 3/Y (or cheaper trims of the S/X) for a while yet- there's no place to produce them yet.

(we could debate who will do so first I suppose- be it GigaBerlin in the euro Y, GigaAustin in the Cybertruck, or new RR lines at GF-N for Freemont... but none of those are running today... though even if they are- again even folks buying sub-100k cars don't keep them for half a million miles, let alone one million- it's not the rated miles that will be the Big Deal for the mission- see below on that)

The most telling words in what you wrote are "for me". No matter how you cut it, a million-mile battery is a technological advance that others have to try to match.

Not really.

CATL already announced one before Tesla, and it's for sale to anybody who wants it.

I'm not aware of anybody having rushed over there to sign up though.

Because "million mile battery" doesn't add much value but as a marketing slogan because new car buyers don't keep the car for 1/4 of that mileage typically.

CATLs battery costs a bit MORE than the non-million mile version.

If "million mile" itself added any value people would pay CATL for it

Again- 0 customers announced so far.

Almost like just million mile isn't really the point or the value.



As I said, the BD advances that'll make major difference to the company will be:

cheaper batteries
and
much easier to produce in huge numbers batteries.


Tesla sales aren't being held back because they "only" are rated for 1500 cycles instead of 4000.

They're held back because they literally can't make enough of them.... and they can't make them cheap enough to make the cars significantly cheaper.


That's not me- that's Elon. Those are the two specific things he cited as what's holding them back. Not "the batteries are only good for HALF a million miles..."

Your hubris is showing. Again (Fleet Operators are 'people' too).

I do not think that word means what you think it means

"fleet sales" is not even a rounding error for Tesla....
Electric cars are changing the cost of driving.

That's the same folks you just cited.

As of late 2019 their "fleet" was.... seven total cars

if that's the only defense of your argument it's a very poor argument.

Telsa isn't targeting the average American car buyer. Tesla is targeting why people buy cars.

Yes... and "lasts 6 times longer than I plan to own it" instead of "lasts 3 times longer than I plan to own it" isn't why people buy cars.


Again- Elon has told us what's holding back Teslas sales... and it's not "the battery only lasts HALF a million miles"


It's that they cant' make enough and they cost too much. THOSE are the 2 big things we need from battery day- both as investors and people interested in the mission of the company.


"million mile battery" is a marketing line. See again nobody rushing out to buy CATLs- not even Tesla who IS buying NON million mile versions from em.

if million mile added value why wouldn't they buy those instead?

 

[capster]

The only thing I've changed is that on days when my account is up a lot I remove a chunk from my account, essentially moving it to cash under my mattress. I still maintain some core shares, rather more core option positions for leverage, and regularly bet on short-term short puts for fun. Well, I've also pretty much stopped using much margin.

I have no insurance for TSLA at 40. I'll likely just get out of everything due to excessive pain. On my way down 90% I passed several milestones where I had told myself I would get out, but I didn't because I was sure it was going up soon. I'll try to be smarter this time.

I’m a bit baffled by your sentiments and to a certain extent those of @Lycanthrope. I too have been bouncing along "privileged" to have risked much in TSLA since 2015 and, oh boy yes, have there been nauseating drops. What’s new?

However, Tesla itself has been making and continues to make remarkable progress, so I am confident in my tiny fraction of ownership in the company.

Yet, I certainly don’t know what the price of TSLA shares should be at any given moment in time.

Do any of the analysts know? Doubtful. If they had the remotest clue, they’re not likely to be sharing it for free, publicly. Wood and ARK are nice but they don’t include Tesla Energy.

‘Mr. Market’ appears more bullish than in prior times but still prone to spasms of illucidity (if that’s not a word, I’m coining this phrase with it ). So the market doesn’t really know either.

As it happens, I too am buying a house (after recently divorcing and not in a super expensive place). I’m taking on debt to avoid touching my TSLA shares for at least a number more years: I don’t want to have to worry about short term price fluctuations. (And, obviously, to take advantage of the cheap money. Never, as they say, argue with the fed ).

Sure, if you need the money, sell shares. That is one of the three valid reasons to sell.

The share price going down is not a valid reason by itself to sell, imho. But, then I’m just a simple buy-and-hold kind of shareholder.

 

[capster]

Your naivete is funny.

Politicians care and they are the ones who create tax policy. Sometime in the future, we can hope public sentiment towards EVs becomes strong enough to shift attitudes in D.C.

Yes, once the energy transformation is nearly complete, politicians will hustle to the front of the parade and claim to have led it.

 

[RobStark]

The major flaw in the argument for the 1MM drivetrain is the assumption that the rest of the car design has not changed substantially since the car was introduced.

Tesla has shown that they will continue to innovate not just software, but hardware.

I have a 7.5 year old P85, and that car is starting to feel "long in the tooth" compared to my Model 3.


The P85 we have is going to be sold in the next year or so and replaced with a Model Y.
Reasons being:
1) Improved overall efficiency (we like being Net Zero or less when it comes to grid electric usage, and the Y is about 35-40% more efficient per mile than our 2013 P85)
2) Improved user experience. We cannot get Autopilot, etc. on our P85
3) Decreased charge time
4) Improved range


If Tesla's hardware innovations had plateaued, then the argument to keep the P85 would be stronger, but they haven't.

Many folks are perfectly happy driving 15 year old cars as long as they are reliable.

If they are reasonably assured 15 year old Tesla will not be a money pit many would be happy to own for next 40 years. Even if it has inferior tech to a brand new Tesla.

Not everyone stands in line for the next Iphone.

 

[Tslynk67]

I’m a bit baffled by your sentiments and to a certain extent those of @Lycanthrope. I too have been bouncing along "privileged" to have risked much in TSLA since 2015 and, oh boy yes, have there been nauseating drops. What’s new?

However, Tesla itself has been making and continues to make remarkable progress, so I am confident in my tiny fraction of ownership in the company.

Yet, I certainly don’t know what the price of TSLA shares should be at any given moment in time.

Do any of the analysts know? Doubtful. If they had the remotest clue, they’re not likely to be sharing it for free, publicly. Wood and ARK are nice but they don’t include Tesla Energy.

‘Mr. Market’ appears more bullish than in prior times but still prone to spasms of illucidity (if that’s not a word, I’m coining this phrase with it ). So the market doesn’t really know either.

As it happens, I too am buying a house (after recently divorcing and not in a super expensive place). I’m taking on debt to avoid touching my TSLA shares for at least a number more years: I don’t want to have to worry about short term price fluctuations. (And, obviously, to take advantage of the cheap money. Never, as they say, argue with the fed ).

Sure, if you need the money, sell shares. That is one of the three valid reasons to sell.

The share price going down is not a valid reason by itself to sell, imho. But, then I’m just a simple buy-and-hold kind of shareholder.

I think in my case it's more the issue that I have a wife wanting to buy this bloody house, so the danger of having to exit some positions in the near-to-mid future - totally changes your perception on price movements, trust me.

 

[bkp_duke]

Many folks are perfectly happy driving 15 year old cars as long as they are reliable.

If they are reasonably assured 15 year old Tesla will not be a money pit many would be happy to own for next 40 years. Even if it has inferior tech to a brand new Tesla.

Not everyone stands in line for the next Iphone.

That is one argument, but the converse is that Tesla buyers, by their nature, are tech savvy buyers and WANT those features.

I know for sure that not having AP on the P85 is driving me bonkers. I love long road trips, but no longer want to take the P85 for those.

 

[capster]

I think in my case it's more the issue that I have a wife wanting to buy this bloody house, so the danger of having to exit some positions in the near-to-mid future - totally changes your perception on price movements, trust me.

Yeah, I’ll bet it does. Better than divorce though, trust me.

At the end of the day, it ain’t the money that matters.

 

[Chunky Jr.]

The P85 we have is going to be sold in the next year or so and replaced with a Model Y.

I traded in my P85 for a Model Y and love it! It took some getting used to the single screen, but otherwise it is great to drive and it is nice having all the latest bells and whistles.

 

[SunCatcher]

Yeah, I’ll bet it does. Better than divorce though, trust me.

At the end of the day, it ain’t the money that matters.

Bad joke, but at the time, it worked for me;

"Why is divorce so expensive? Because it's worth it."

 

[AudubonB]

We....espouse...HODL around here.

 

[tinyrodent]

Close-up fly through of Giga Berlin construction

 

[jerry33]

Pfft! You weren’t here when the SIX theory was examined VERY closely and discussed in-depth for months on end. It’s a solid, proven theory.

And that was a sweet ride. I was controlling it with my mind.

Early NuraLink tester.